THE  VIRGINIA  DEBT  CONTROVERSY 


BY 

JAMES  G.  RANDALL 


REPRINTED  FROM  POLITICAL  SCIENCE  QUARTERLY 
Volume  XXX,  No.  4,  December,  1915 


NEW  YORK 

PUBLISHED  BY  GINN  &  COMPANY 


THE  VIRGINIA  DEBT  CONTROVERSY 


BY 

JAMES  G.  RANDALL 


REPRINTED  FROM  POLITICAL  SCIENCE  QUARTERLY 
Volume  XXX,  No.  4,  December,  1915 


NEW  YORK 

PUBLISHED  BY  GINN  &  COMPANY 

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THE  VIRGINIA  DEBT  CONTROVERSY1 

A  STATE  in  the  American  union  possesses  a  unique  status 
incapable  of  easy  definition.  It  occupies  a  middle 
position,  superior  to  that  of  a  private  litigant,  but  below 
that  of  a  sovereign  or  independent  nation.  A  state  cannot  in 
general  be  sued  by  individuals  without  its  consent,  but  the  per¬ 
formance  of  contracts  in  which  individuals  are  concerned  can 
be  forced  by  the  Supreme  Court.  When  the  contract  is 
between  two  states  it  has  a  binding  force  greater  than  that  of 
any  treaty  between  nations.  For  while  the  general  sanctions  of 
international  law  are  alone  relied  upon  for  the  enforcement  of 
treaties,  an  American  state  is  definitely  answerable  to  the  Su¬ 
preme  Court  for  the  performance  of  its  obligations  to  other 
states,  and  is  subject  to  judgment  in  case  these  obligations  are 
neglected.  Theoretically,  of  course,  a  state  may  resist  the  exe¬ 
cution  of  a  decree  of  the  Supreme  Court,  but  such  resistance 
has  been  tried  so  seldom  that  it  is  out  of  the  question  as  a 
practical  course  of  action.  The  Supreme  Court,  it  may  be 
noticed,  in  deciding  between  states,  exercises  a  power  greater 
than  that  of  an  international  arbitrator.  It  has  the  authority  to 


1 1  desire  here  to  acknowledge  my  special  indebtedness  to  Hon.  A.  A.  Lilly,  at¬ 
torney-general  of  West  Virginia,  for  supplying  valuable  documentary  material,  and 
to  Col.  William  A.  Anderson  of  Lexington,  former  attorney-general  of  Virginia,  a 
man  thoroughly  familiar  with  every  stage  of  the  litigation,  for  his  kind  assistance  in 
criticizing  my  manuscript  and  affording  me  the  courtesy  of  a  long  interview.  Val¬ 
uable  material,  besides,  has  been  lent  to  me,  and  bibliographical  aids  have  been 
furnished  by  Dr.  Herbert  Putnam,  librarian  of  Congress,  and  Dr.  H.  R.  Mcllwaine, 
state  librarian  of  Virginia.  Through  the  office  of  the  clerk  of  the  Supreme  Court 
of  the  United  States  I  have  been  kept  advised  of  many  important  points  in  the 
litigation. 


553 


554 


POLITICAL  SCIENCE  QUARTERLY  [Vol .XXX} 


summon  a  defendant  state  on  the  filing  of  the  plaintiff  state’s 
bill — a  power  which  belongs  to  no  international  court.  Its  de¬ 
crees,  furthermore,  are  of  more  force  than  an  arbitral  award, 
for  they  are  the  law  of  the  land.  Thus,  while  a  controversy 
between  states  may  be  quasi-international,  and  may  often  rest 
in  principle  on  the  law  of  nations,  yet  subordination  and  not 
sovereignty  is  its  controlling  feature. 

When  West  Virginia  parted  from  Virginia  in  1863  there 
were  two  important  matters  which  remained  for  later  adjustment 
- — the  fixing  of  the  boundary,  and  the  apportionment  of  the  debt. 
The  first  of  these  was  settled  with  reasonable  promptness  by  the 
Supreme  Court  in  1870,  when  the  right  of  West  Virginia  to  two 
counties  in  dispute  was  upheld.1  The  debt  question  has  re¬ 
mained  unsettled  for  half  a  century,  during  which  time  no  part 
of  the  common  debt  has  been  assumed  by  the  new  state,  while 
in  the  Old  Dominion  the  debt  has  been  ever  present  as  a  vexing 
problem,  both  in  finance  and  in  politics.  The  relations  ensuing 
between  the  states,  so  far  as  they  pertain  to  this  debt,  constitute 
the  theme  of  this  article. 

The  amount  of  Virginia’s  debt  was  $33,897,073.82  on  Jan¬ 
uary  1,  1861,  a  date  selected  because  of  its  convenience  in  the 
calendar  year,  and  because  it  roughly  corresponds  to  the  se¬ 
cession  of  Virginia  and  the  de  facto  separation  of  the  two  states. 
An  analysis  of  the  substance  of  the  debt  will  show  that  it  com¬ 
prised  an  elaborate  series  of  schedules,  representing  expendi¬ 
tures,  mostly  since  1830,  for  river  improvements,  surveys, 
swamp  reclamation,  canals,  roads,  turnpikes,  railroads,  bridges  * 
and  navigation  companies.  These  expenditures,  besides  reveal¬ 
ing  a  lively  activity  on  the  part  of  the  state  government  for  vari¬ 
ous  forms  of  internal  improvements,  bring  to  light  certain 
significant  features  of  Virginia’s  method  of  promoting  economic 
development.  The  practice  of  subsidizing  railroads  and  im- 

1  In  this  case  the  jurisdiction  of  West  Virginia  over  Berkeley  and  Jefferson  counties 
was  sustained.  The  acts  of  the  “restored”  government  of  Virginia  were  treated  as 
valid,  and  the  case  therefore  involves  a  recognition  by  the  Supreme  Court  of  the 
legality  of  the  process  by  which  West  Virginia  was  created.  This  was  simply  an  ap¬ 
plication  of  the  Supreme  Court’s  general  policy  of  acquiescence  in  the  settlement  of 
political  questions.  11  Wallace  39. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


555 


provement  companies  was  prominent,  and  in  many  cases  the 
state  became  a  stockholder  in  private  corporations,  while  in  other 
cases  the  State  Board  of  Public  Works  constructed  purely 
governmental  projects  under  the  form  of  a  corporation.  The 
Covington  and  Ohio  Railroad  Company,  for  instance,  was  not  a 
private  corporation  at  all,  but  merely  a  legal  form  through 
which  the  Board  of  Public  Works  acted.  1 

That  the  east  enjoyed  more  than  a  proportional  benefit  from 
these  improvements  was  the  repeated  charge  of  West  Virginia 
leaders.  Representative  Whaley,  speaking  in  1862  in  the 
House  of  Representatives,  declared  that  of  the  “  forty-four 
millions  ”  of  state  debt  expended  in  internal  improvements  up 
to  January  1,  1861,  only  one  million  and  a  half  had  been  spent 
in  the  counties  comprising  West  Virginia.2  His  statement  was 
only  a  rough  estimate,  and  of  course  did  not  take  into  account 
the  considerable  amount  of  bordering  territory  later  added  to 
West  Virginia.  Granville  D.  Hall,  in  his  Rending  of  Virginia , 
dwells  upon  the  partiality  of  the  Richmond  government  to  the 
eastern  portion  of  the  state,  and  shows  that  after  the  Baltimore 
and  Ohio  Railroad  had  extended  its  branch  to  Winchester  the 
Virginia  assembly  refused  further  charters. 3  The  Cleveland 
and  Pittsburgh  line  in  seeking  a  connection  with  Wheeling  was 
denied  a  charter  which  would  permit  the  building  of  a  road  on 
the  Virginia  side,  being  thus  forced  to  run  its  line  on  the  west¬ 
ern  bank  of  the  Ohio,  and  to  establish  a  terminus  one  mile  away 
from  its  objective  point.  Moreover,  from  1823  to  1861,  the 
debt  period,  not  a  single  public  building  had  been  completed 
within  the  limits  of  the  new  state.4  These  grievances,  in  the 
view  of  West  Virginians,  were  aggravated  by  the  greater  pro- 

1  Report  of  Special  Master,  Commonwealth  of  Virginia  v.  State  of  West  Virginia* 
March  17,  1910  (Charleston,  W.  Va.,  1910). 

2  The  “  forty-four  millions”  was  figured  without  reference  to  the  amount  redeemed 
by  1861.  Cong.  Globe ,  37th  Congress,  2nd  session,  p.  3269. 

3  Hall,  Rending  of  Virginia,  p.  60  ff. 

4  A  sum  of  $98,000014  of  an  appropriation  of  $125,000  had  been  expended  on  the 
Trans-Alleghany  Lunatic  Asylum  at  Weston  in  Lewis  county,  which  was  unfinished 
in  January,  1861.  The  remaining  $27,000  was  seized  by  the  “  restored  ”  govern¬ 
ment  and  used  in  prosecuting  the  war.  Debt  Suit,  Virginia  v.  West  Virginia, 
(compiled  by  Attorney-General  A.  A.  Lilly  of  West  Virginia,  1913)  P-  1 


POLITICAL  SCIENCE  QUARTERLY  [Vol .XXX) 


556 

portionate  representation  of  the  east  in  the  legislature  as  com¬ 
pared  with  the  west,  and  by  various  discriminations  in  the  levying 
of  taxes  which  favored  eastern  landlords  and  slave-owners. 

On  the  other  hand,  men  speaking  for  Virginia  have  claimed 
that  the  indebtedness  was  common  to  both  sections,  incapable  of 
minute  dissection  according  to  locality,  that  it  was  largely  in¬ 
curred  for  improvements  which  benefited  West  Virginia,  that 
many  of  the  eastern  lines  of  communication  were  designed 
ultimately  to  penetrate  West  Virginia  territory,  that  the  enor¬ 
mous  increase  in  property  values  in  West  Virginia  since  the  war 
gives  evidence  of  the  benefit  derived  from  these  expenditures, 
and  that  without  the  votes  of  the  western  delegates  in  the 
Virginia  assembly  only  a  small  part  of  them  would  have  been 
possible.1  After  balancing  the  claims  of  both  sides,  we  may 
turn  to  the  finding  of  the  special  master  appointed  by  the 
Supreme  Court  in  1907  and  discover  that  the  total  “expendi¬ 
tures  made  by  the  commonwealth  of  Virginia  within  the  terri¬ 
tory  ...  of  West  Virginia  since  any  part  of  the  debt  was 
contracted”  was  $2,811,559.98,  which  is  less  than  one-tenth 
of  the  total  debt  as  it  stood  in  1861. 2  We  must,  however, 
guard  against  the  conclusion  that  West  Virginia’s  rightful  share 
of  the  debt  is  equivalent  to  the  calculated  amount  of  expendi¬ 
tures  within  her  limits. 

At  the  time  of  separation  there  were  various  agreements 
between  the  newly  formed  state  and  the  “  restored  ”  state  of 
Virginia  regarding  the  matter  of  debt  distribution,  though  of 
course  there  were  no  agreements  to  which  Confederate  Virginia 


1  Brief  for  Virginia  in  Virginia  v.  West  Virginia,  decided  March  6,  1911.  Statis¬ 
tics  are  submitted  in  this  brief,  showing  that  the  assessed  value  of  all  property  in  West 
Virginia  has  increased  from  126  millions  of  dollars  in  1867  to  937  millions  in  1908, 
an  increase  of  643  per  cent;  while  in  Virginia  for  the  same  period  the  assessed  value 
of  taxable  property  advanced  from  354  millions  to  661  millions,  only  84  per  cent. 
In  attributing  this  advance  to  the  old  state’s  policy  of  internal  improvements  before 
the  war,  the  counsel  indulges  in  a  decidedly  specious  argument. 

2  It  is  fair  to  state,  however,  that  the  master  disallowed  a  number  of  items  of  ex¬ 
penditure  on  the  ground  that  they  were  made  in  the  form  of  stock  subscriptions  in 
improvement  companies  over  whose  property  the  state  had  no  control  except  as  a 
stockholder,  and  that  technically  these  were  not  expenditures  by  the  commonwealth. 
The  addition  of  these  items  would  swell  the  total  to  $3,915,960.  Report  of  Special 
Master,  paragraph  iii. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


55  7 


was  a  party.  On  August  20,  1861,  a  Union  convention  at 
Wheeling  claiming  the  character  of  a  constituent  assembly 
acting  for  all  of  Virginia  (a  claim  which,  however  irregular,  has 
nevertheless  been  legally  sustained  by  various  acts  and  decisions 
during  and  after  the  war)  passed  an  ordinance  to  “  provide  for 
the  formation  of  a  new  state  out  of  the  territory  of  this  state.” 
The  following  provision  was  contained  in  article  9  of  this 
ordinance : 

The  new  State  shall  take  upon  itself  a  just  proportion  of  the  public 
debt  of  the  Commonwealth  of  Virginia,  prior  to  the  first  day  of  January, 
1861,  to  be  ascertained  by  charging  to  it  all  the  state  expenditures 
within  the  limits  thereof,  and  a  just  proportion  of  the  ordinary  expenses 
of  the  State  government  since  any  part  of  said  debt  was  contracted, 
and  deducting  therefrom  the  moneys  paid  into  the  treasury  of  the 
Commonwealth  from  the  counties  included  within  the  said  State  during 
said  period.1 

If  this  provision  should  be  regarded  as  binding  upon  the  two 
states  after  reconstruction  it  would  not  only  require  West  Vir¬ 
ginia’s  assumption  of  a  just  share  of  the  debt,  but  would  deter¬ 
mine,  at  least  in  general  terms,  the  basis  on  which  such  appor¬ 
tionment  should  be  made.  The  problem  of  definitely  applying 
this  much-mooted  article,  and  of  determining  to  what  extent  it 
should  be  deemed  binding,  has  persisted  as  one  of  the  leading 
issues  throughout  the  whole  litigation. 

The  constitution  of  West  Virginia,  framed  by  convention  in 
November,  1861,  and  ratified  in  April,  1862,  bound  the  new  state 
to  assume  an  “  equitable  proportion  ”  of  the  debt  up  to  January, 
1861,  and  directed  the  legislature  to  ascertain  the  amount  “as 
soon  as  possible  ”  and  to  provide  for  its  liquidation.  The  legis¬ 
lature  of  the  “  restored  state,”  accepting  the  terms  expressed  in 
this  constitution,  gave  its  consent  in  May,  1862,  to  the  creation 
of  the  new  state.  Congress,  by  an  act  of  December  31,  1862, 
added  its  sanction  to  this  agreement  by  admitting  West  Virginia 
into  the  union  on  the  basis  of  her  constitution  and  Virginia’s 
act  of  consent.  This  action  of  Congress  sealed  the  contract 


1  Hall,  Rending  of  Virginia,  p.  380;  220  U.  S.  25. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX 


558 

between  the  states  by  which  West  Virginia  was  bound  to  pay 
an  “  equitable  proportion  ”  of  the  debt.1 

Virginia  complains  that  while  she  has  made  repeated  efforts 
to  secure  a  peaceable  adjustment  with  West  Virginia,  and  thus 
avoid  a  suit  in  the  Supreme  Court,  the  latter  state  has  steadily 
refused  to  treat  on  the  subject.  It  appears  that  the  legislature 
of  West  Virginia  in  1867  directed  the  governor  to  appoint 
commissioners  to  adjust  the  debt  with  Virginia.  At  the  time> 
however,  a  suit  between  the  two  states  involving  two  border 
counties  was  pending  in  the  Supreme  Court,  and  obviously  no 
agreement  could  be  reached  until  the  exact  extent  of  West 
Virginia  was  settled.  Delay  was  also  due  to  the  anomalous 
condition  of  Virginia  during  reconstruction,  the  state  not  being 
readmitted  into  the  union  until  1870.  In  that  year  Virginia 
appointed  three  commissioners  who  were  met  by  a  committee 
of  the  West  Virginia  legislature,  but  no  progress  was  made  by 
this  conference.  Virginia  in  1871  made  an  offer  of  “arbitra¬ 
tion  ”  by  citizens  outside  the  two  states,  but  this  was  rejected  by 
West  Virginia  on  the  ground  that  citizen  commissioners  within 
the  states  would  be  more  familiar  with  the  case,  and  that  any 
adjustment  should  be  subject  to  the  ratification  of  the  legislature 
of  each  state.  A  debt  commission  of  three  was  created  by 
West  Virginia  in  1871,  and  proceeded  to  Richmond  to  search 
documents,  but  the  information  solicited  from  the  second  auditor 
of  Virginia  was  declined,  and  Governor  Walker  of  Virginia 
refused  to  appoint  commissioners  to  cooperate  with  the  repre¬ 
sentatives  of  West  Virginia.2  The  situation  was  now  further 

1  Debt  Suit,  Virginia  v.  West  Virginia,  (Compiled  by  Attorney-General  A.  A. 
Lilly,  Charleston,  W.  Va.,  1913)  p.  398  ff ;  Poole,  Charters  and  Constitutions,  pt. 
ii,  1989,  1992;  Memorial  of  the  Commissioners  appointed  by  the  Convention  of 
West  Virginia  for  Admission  into  the  Union,  Sen.  Misc.  Doc.,  no.  99,  37th  Con¬ 
gress,  2nd  session. 

2  The  commissioners  from  West  Virginia  addressed  a  communication  to  the  second 
auditor  of  Virginia,  calling  for  specific  information  on  a  series  of  points  touching  the 
amount  and  disposition  of  the  debt.  To  have  supplied  this  information  would  have 
necessitated  a  laborious  search  through  the  records  of  the  second  auditor’s  office,  and 
that  of  the  Board  of  Public  Works,  and  the  information  was  therefore  not  furnished, 
though  all  the  books  and  records  were  made  available  for  the  commissioners’  inspec¬ 
tion.  Governor  Walker’s  action  in  declining  to  appoint  commissioners  to  treat  with 
the  West  Virginia  commission  was  due  to  his  distrust  of  this  method  of  settling  the 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


559 


complicated  by  certain  measures  of  the  Virginia  legislature 
which  funded  the  debt  in  such  a  way  as  to  make  settlement 
even  more  remote. 

To  these  troublesome  funding  acts  we  must  now  turn  our 
attention,  noticing  their  bearings  upon  the  interests  of  the  bond¬ 
holders  and  upon  West  Virginia’s  rights.  The  debt  had  piled 
up  during  the  war  and  reconstruction,1  till  in  1871  the  entire 
debt  of  Virginia  amounted  to  forty-seven  millions  (counting  the 
accumulated  interest  which  had  partially  lapsed).  The  measure 
passed  in  1871  for  funding  this  debt  proved  exceedingly  vexa¬ 
tious  to  the  state.  The  law  provided  that  new  bonds  for  two- 
thirds  of  the  debt  were  to  be  issued — certificates  being  given 
for  the  remaining  third — the  interest  to  be  at  six  per  cent,  and 
the  maturing  coupons  to  be  receivable  for  taxes.  It  soon 
became  clear  that  this  act,  the  passage  of  which  had  been  hasty 
and  not  free  from  suspicion,  would  put  the  state  under  a  burden 
which  it  could  not  bear.  The  people  would  not  submit  to  an 
increase  in  taxation  sufficient  to  carry  the  heavy  interest  pay¬ 
ments  and  at  the  same  time  provide  properly  for  the  extension 
of  popular  education,  the  maintenance  of  the  civil  government, 
the  support  of  state  charities,  and  the  care  of  the  old  soldiers. 
Popular  feeling  ran  high  as  the  debt  question  was  carried  to  the 
hustings,  and  the  struggle  waxed  hot  between  the  “  Funders” 
and  the  “  Readjusters,”  the  latter  party  favoring  a  scaling  of  the 


debt,  and  to  the  fact  that  the  younger  state  had  refused  arbitration.  The  commission 
from  the  new  state  after  an  independent  investigation  announced  the  finding  that 
West  Virginia’s  share  of  the  debt  was  $953,360.28.  The  only  result  of  these  un¬ 
fortunate  incidents  was  to  create  a  misunderstanding,  and  to  cause  the  West  Virginia 
authorities  to  feel,  though  perhaps  unjustly,  that  they  had  been  offended.  Report  of 
West  Virginia  Commissioners,  West  Virginia  Compilation,  I,  457-472;  Debt  Suit, 
pp.  12-20. 

1  In  accordance  with  the  general  rule  of  international  law  the  interest  payments  to 
Union  creditors  ceased  during  the  war,  but  certain  sums  were  remitted  in  coin  to 
London  for  foreign  bondholders,  and  small  payments  were  made  in  Virginia  in  Con¬ 
federate  money.  There  were  further  payments  during  the  period  of  reconstruction. 
Virginia’s  counsel  showed  in  the  1911  suit  that  Virginia  had  paid  nearly  11  millions 
on  the  undivided  debt  between  1861  and  1S71.  $7,255,723.66  was  paid  in  interest 

during  this  decade,  and  bonds  were  redeemed  to  the  extent  of  $3,710,449.67,  thus 
making  a  total  of  $10,966,173.33,  for  which  sum  Virginia  preferred,  in  her  own 
right,  an  equitable  claim  for  contribution.  Complainant’s  Reply  Brief,  Debt  Suit, 
535-536;  Hartman  v.  Greenhow,  102  U.  S.  676. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX 


560 

debt,  while  the  former  insisted  on  the  execution  of  the  hard 
terms  of  the  funding  bill. 

In  1879  a  refunding  scheme  was  enacted  known  as  the 
“  McCulloch  bill”  with  a  lower  (graduated)  rate  of  interest,  but 
the  act  was  unsuccessful  owing  to  the  failure  of  a  sufficient 
number  of  the  bondholders  to  avail  themselves  of  it. 

A  landslide  for  the  “  Readjusters”  led  in  1882  to  the  passage 
of  the  “  Riddleberger  bill.”  The  amount  of  the  debt  was 
restated  at  21  millions,  and  bonds  bearing  three  per  cent  and 
payable  in  fifty  years  were  to  be  issued  for  any  outstanding 
obligations  of  the  state  at  ratios  definitely  specified  in  the  case 
of  each  class  of  securities.  It  soon  became  clear  that  the 
Riddleberger  settlement  was  unsatisfactory.  The  people  in 
general  approved  it,  but  the  correctness  of  the  rate  of  scaling 
was  questioned,  and  it  was  not  sufficiently  tempting  to  induce 
many  of  the  old  bondholders  to  accept  its  terms.1 

Moreover,  a  serious  difficulty  had  arisen  in  the  meantime  by 
reason  of  the  tax-receivable  feature  of  the  old  coupons.  The 
state  treasury  was  finding  itself  sadly  embarrassed  by  the  pres¬ 
entation  of  coupons  in  large  numbers  for  the  settlement  of 
taxes,  and  a  coupon  agency  maintained  by  bondholders  was 
operating  to  intercept  the  state’s  revenue  by  selling  coupons  to 
tax-payers.  A  veritable  legal  war  ensued  between  the  State  of 
Virginia  and  the  bondholders,  in  the  course  of  which  the  inge¬ 
nuity  of  the  legislature  in  obstructing  the  use  of  the  tax-paying 
coupons  was  matched  against  the  authority  of  the  federal  courts 
to  which  the  “  merciless  bondholders”  applied.  To  free  the 
state  from  what  seemed  an  intolerable  situation,  the  tax-receiv¬ 
able  feature  of  the  act  of  1871  was  repealed.  This  repeal  was 
invalidated  as  an  impairment  of  contract,  and  then  various 
devices,  popularly  known  as  “  coupon  killers  ”  and  “  coupon 
crushers  ”  were  adopted  for  defeating  the  right  to  use  coupons 

1  For  the  bearings  of  the  funding  acts  upon  Virginia’s  relation  to  the  bondholders, 
see  Special  Message  of  the  Governor  of  Virginia  transmitting  the  Report  of  the 
Commission  appointed  on  the  Public  Debt,  Jan.  14,  1892.  (This  message,  with  ac¬ 
companying  documents,  was  recently  reprinted  for  the  use  of  the  West  Virginia  Debt 
Commission.)  The  effect  of  these  measures  upon  the  internal  politics  of  Virginia  is 
vividly  treated  in  Royall,  History  of  the  Virginia  State  Debt  Controversy  (Richmond, 
1897). 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


56l 

for  tax  payment,  such  as  forcing  upon  the  tax-payer  the  expense 
of  a  suit  in  order  to  “verify”  the  coupons,  excluding  expert 
testimony  to  prove  their  genuineness,  subjecting  the  coupons 
to  a  tax,  and  withholding  the  remedy  of  mandamus.  These 
obstructive  proceedings  were  declared  invalid  by  the  Supreme 
Court,  but  they  served  the  purpose  for  the  time,  and  were 
promptly  followed  by  other  provisions  equally  effective  in  pro¬ 
tecting  the  treasury  against  the  coupon  brokers  who  were 
bidding  fair  to  absorb  a  large  part  of  the  state’s  revenues.1  At 
the  same  time  the  activities  of  “anti-coupon”  men  became 
pronounced,  and  those  who  tendered  coupons  for  taxes  were 
denounced  in  public  meetings  as  enemies  of  the  state. 

Owing  to  the  small  number  of  creditors  who  accepted  the 
new  bonds  provided  in  the  refunding  acts  of  1879  and  1882, 
the  debt  by  the  year  1890  had  become  nearly  unmanageable. 
The  assembly  therefore  authorized  a  commission  to  negotiate 
with  the  bondholders.  The  result  was  the  “  Olcott  settlement,” 
enacted  into  law  in  1892,  by  which  the  debt  was  scaled  down, 
without,  however,  involving  the  charge  of  repudiation,  since  the 
bondholders  by  their  committee  had  consented  to  the  adjust¬ 
ment.  In  exchange  for  twenty-eight  millions  of  outstanding 
bonds  this  act  provided  for  nineteen  millions  of  new  bonds  to 
run  for  one  hundred  years,  the  interest  to  be  two  per  cent  for 
ten  years  and  three  per  cent  for  ninety  years,  the  coupons  not 
to  be  receivable  for  taxes.  This  settlement  was,  on  the  whole, 
satisfactory  to  the  state. 

Such  features  of  these  funding  acts  as  concerned  West  Virginia 
now  demand  attention.  The  original  funding  act  of  1871,  as¬ 
suming  in  the  preamble  that  West  Virginia  contained  at  the  time 
of  separation  “  about  one-third  of  the  territory  and  population 
of  the  state  of  Virginia,”  provided  for  the  surrender  of  the  old 


1  A  number  of  these  cases  reached  the  Supreme  Court.  The  obstructive  regulations 
were  declared  invalid,  and  the  original  contract  of  1871  by  which  the  coupons  were 
made  receivable  for  taxes  was  held  to  be  a  binding  obligation  upon  the  state,  any 
impairment  of  which  was  in  violation  of  the  federal  constitution.  In  most  of  the 
decisions  mandamus  writs  compelling  treasurers  to  receive  the  coupons  were  sustained. 
Hartman  v.  Greenhow,  102  U.  S.  672;  Antoni  v.  Greenhow,  107  U.  S.  769;  Vir¬ 
ginia  Coupon  Cases,  114  U.  S.  269;  McGahey  v.  Virginia,  135  U.  S.  662. 


562  POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX 

bonds  in  return  for  new  bonds  for  two-thirds  of  the  debt.  For 
the  unfunded  third,  certificates  were  to  be  issued  providing 
payment  “  in  accordance  with  such  settlement  as  shall  hereafter 
be  made  between  the  states  of  Virginia  and  West  Virginia  in 
regard  to  the  public  debt  ...  at  the  time  of  .  .  .  dismember¬ 
ment.”  The  same  two-thirds  division  was  observed  in  the  act 
of  1879,  and  in  place  of  a  provision  assuming  a  conditional 
liability  for  the  unfunded  portion,  the  law  provided  that  Vir¬ 
ginia  would  negotiate  with  West  Virginia  in  the  interest  of  the 
certificate  holders  and  stipulated  that  “  the  acceptance  of  .  .  . 
certificates  for  West  Virginia’s  one-third  .  .  .  shall  be  taken  and 
held  as  a  full  and  absolute  release  of  the  state  of  Virginia  from 
all  liability  on  account  of  said  certificates.  ”  In  the  Riddle- 
berger  bill  of  1882  and  the  Olcott  settlement  of  1892  the  holders 
of  the  unassumed  and  unfunded  third  were  still  remanded  to  the 
tender  mercies  of  West  Virginia  without  any  recourse  upon 
the  commonwealth  of  Virginia.  1 

These  funding  acts  present  several  considerations  which  de¬ 
serve  careful  attention.  It  will  be  noticed  that,  at  a  time  when 
the  division  of  the  debt  was  subject  to  negotiation  between  the 
states,  Virginia  fixed  her  own  and  West  Virginia’s  share  without 
consulting  West  Virginia,  and  on  no  definite  basis  of  appor¬ 
tionment  other  than  a  broad  estimate  that  West  Virginia 
comprised  “  about  one-third  ”  of  the  population  and  area  of  the 
undivided  state.  By  her  funding  operations  Virginia  scaled 
down  the  debt,  secured  a  lower  rate  of  interest,  and  derived 
other  advantages.  By  the  acts  subsequent  to  1871  she  sought 
to  release  herself  from  any  liability  for  the  unfunded  portion.2 

* 

1  A  brief  summary  of  these  funding  acts  is  to  be  found  in  the  Supreme  Court’s 
decision  in  Virginia  v.  West  Virginia,  220  U.  S.  1.  See  also  Debt  Suit,  p.  30  ff. 

2  In  considering  Virginia’s  liability  for  the  unfunded  third  of  the  debt  it  should  be 
noted  that  none  of  the  refunding  acts  passed  since  1871  made  the  surrender  of  the 
old  certificates  compulsory.  As  a  matter  of  fact  the  majority  of  the  holders  declined 
to  accept  the  new  securities,  and  the  refunding  operations  must  be  regarded  as  only 
partially  successful.  As  to  the  original  funding  act  of  1871,  the  fair  inference  is  that 
the  law  did  not  release  the  state  of  Virginia  from  its  obligation  to  pay  the  unfunded 
portion  in  case  West  Virginia  should  fail  to  do  so.  The  case  of  Antoni  v.  Wright,, 
tried  before  the  highest  court  of  Virginia,  involved  the  question  whether  a  valid  con¬ 
tract  had  been  made  by  the  funding  act  of  1871  between  Virginia  and  her  creditors- 
The  dissenting  judge,  Staples,  in  order  to  show  that  the  act  lacked  the  essentials  of  a 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


563 

On  the  other  hand  it  may  be  said  in  her  favor  that  the  old  un¬ 
satisfactory  condition  of  the  debt  could  not  continue  much 
longer;  that  until  a  settlement  between  the  states  should  be 
reached  the  bondholders  would  look  to  her  for  satisfaction, 
whereas  West  Virginia  might  delay  indefinitely  without  any 
impairment  of  credit;  that  Virginia’s  reorganization  of  the  debt 
at  a  lower  rate  of  interest  would  eventually  inure  to  the  advan¬ 
tage  of  West  Virginia  when  a  settlement  involving  interest 
should  finally  be  made;  and  that  a  sum  exceeding  ten  millions 
had  already  been  contributed  by  Virginia  on  the  undivided 
debt  previous  to  1871  before  any  funding  had  been  undertaken.1 
However  natural  might  be  West  Virginia’s  reasons  for  delaying 
payment,  the  fact  remained  that  during  the  period  of  delay  the 
direct  responsibility  to  the  creditors  belonged  to  Virginia,  and 
it  was  unreasonable  to  expect  her  either  to  postpone  her  re¬ 
funding  until  a  final  settlement  should  be  made,  or  to  conduct 
such  refunding  without  at  least  some  tentative  recognition  of 
West  Virginia’s  liability. 

That  the  two-thirds  division,  however,  was  something  more 
than  a  tentative  arrangement  for  adjusting  the  debt  became 
evident  by  later  legislation.  In  1894  the  Virginia  assembly 
passed  a  joint  resolution  creating  a  commission  to  represent  the 
holders  of  the  certificates  and  to  negotiate  with  West  Virginia 
for  an  adjustment  of  the  long-standing  debt  controversy.  It 
was  provided  that  this  commission  should  “  in  no  event  enter 


contract,  declared  that  the  state  of  Virginia  derived  no  benefit  which  could  be  re¬ 
garded  as  a  “valuable  consideration,”  and  argued  emphatically  that  the  state  had 
not  been  released  from  its  former  obligation  for  the  whole  debt.  In  this  connection 
he  said:  “  If  she  [West  Virginia]  repudiates  her  obligations,  there  is  no  agreement 
or  understanding  absolving  the  state  from  the  payment  of  such  third.  It  is  as  much 
bound  for  the  payment  of  the  whole  debt  as  before  the  passage  of  the  funding  bill.” 
These  dissenting  views  of  Staples  are  quoted  in  a  later  case  before  the  supreme  court 
of  Virginia,  and  this  part  of  his  argument  is  approvingly  referred  to  in  the  majority 
opinion  as  “unanswerably  clear.”  Greenhow  v.  Vashon,  81  Va.  336.  Certificates 
under  the  later  refunding  acts,  however,  contained  a  definite  clause  precluding  any 
recourse  upon  Virginia,  and  finally  the  settlement  between  the  creditors’  committee 
and  the  debt  commission  involved  a  promise  on  the  part  of  the  creditors  to  accept 
the  amount  realized  as  a  result  of  a  suit  or  of  the  commission’s  negotiations  without 
any  further  recourse  upon  Virginia. 

1  See  note  1,  p.  559. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.XXX 


564 

into  any  negotiation  .  .  .  except  upon  the  basis  that  Vir¬ 
ginia  is  bound  only  for  the  two-thirds  of  the  debt  of  the  original 
state,  which  she  has  already  provided  for  as  her  equitable 
proportion  thereof.”  1  Such  a  limitation  of  the  powers  of  the 
commission  weakened  its  effectiveness  as  an  agency  for  securing  a 
settlement  with  West  Virginia.2  By  an  act  of  1900  the  powers 
of  the  commission  were  modified.  According  to  this  law, 
whenever  two-thirds  of  the  holders  of  certificates  based  upon 
the  act  of  1871  and  a  majority  of  other  certificate  holders 
should  give  their  consent,  the  commission  was  to  be  invested 
with  control  of  the  certificates  with  the  understanding  that  the 
holders  would  accept  the  amount  realized  from  West  Virginia 
as  a  full  settlement  of  all  their  claims.  Through  the  proper 
committee  the  certificate  holders  contracted  to  accept  the  results 
of  any  settlement  by  the  commission,  or  any  adjudication 
reached  by  the  prosecution  of  a  suit.3  The  result  of  this 
arrangement  would  be  that  if  a  settlement  were  made  by  which 
West  Virginia  assumed  less  than  one-third,  then  the  certificate 
holders  and  not  Virginia  would  stand  the  loss.  All  of  the  com¬ 
mission’s  efforts  to  adjust  the  debt  by  negotiation  have  been 
unavailing.  In  spite  of  this,  no  opportunity  to  pass  upon  the 
matter  as  a  controversy  between  the  two  states  was  presented 
to  the  Supreme  Court  until  1906. 

In  the  case  of  the  Commonwealth  of  Virginia  v.  the  State  of 
West  Virginia,  begun  in  1906,  the  plaintiff  sought  to  have  West 
Virginia’s  share  of  the  debt  determined  and  to  secure  a  decree 
requiring  its  payment. 4  The  Supreme  Court  was  found  to  be 

1  Joint  resolution  of  the  General  Assembly  of  Virginia,  approved  March  6,  1894, 
creating  the  “Virginia  Debt  Commission.”  This  commission  for  negotiating  with 
West  Virginia  should  be  distinguished  from  the  earlier  commission  which  effected 
the  settlement  with  the  creditors  in  1892. 

2  The  statute  of  1894  did  not  mean  that  the  commissioners  should  decline  a  settle¬ 
ment  with  West  Virginia  for  less  than  one-third  of  the  debt,  but  merely  that  the 
bondholders,  not  Virginia,  would  lose  the  difference  in  case  such  a  settlement  were 
made. 

3  West  Virginia  Compilation,  I,  86-87.  See  note  4. 

4  For  a  full  account  of  the  proceedings  and  briefs  in  this  suit,  both  on  the  demurrer 
and  on  the  reference  to  a  special  master,  see:  Proceedings  in  the  Equity  Suit  of  the 
Commonwealth  of  Virginia  v.  the  State  of  West  Virginia,  compiled  by  W.  G.  Conley, 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


565 

a  slow-grinding  mill.  The  first  point  of  contention  arose  over 
the  question  of  jurisdiction.  West  Virginia  presented  a  de¬ 
murrer  and  argued  stoutly  against  the  Supreme  Court’s  juris¬ 
diction  in  the  case.  Her  counsel  maintained  that  this  was  not 
a  controversy  between  states,  since  Virginia  had  by  her  funding 
operations  disposed  of  the  state’s  interest  in  the  deferred  por¬ 
tion  of  the  debt  which  she  had  assumed  to  be  West  Virginia’s 
share.  The  Supreme  Court  made  short  work  of  West  Virginia’s 
cry  of  no  jurisdiction, 1  and  answered  it  by  merely  asserting  its 
original  jurisdiction  in  suits  involving  pecuniary  demands  between 
states.  The  demurrer  was  overruled  in  a  brief  decision  which 
did  not  go  into  the  merits  of  the  case  and  expressed  no  opinion 
regarding  the  legal  effect  of  Virginia’s  refunding  operations. 

Following  the  overruling  of  West  Virginia’s  demurrer  in  May, 
1907,  the  next  phase  of  the  case  was  the  appointment  of  a 
special  master  to  whom  certain  statistical  points  were  referred 
for  ascertainment.  Each  party  prepared  its  draft  of  a  decree 
of  reference,  supporting  the  drafts  with  contending  briefs  and 
reply  briefs,  besides  oral  arguments  of  counsel.  The  court, 
steering  a  middle  course,  issued  as  colorless  a  decree  as  pos¬ 
sible,  asking  the  master  to  investigate  certain  points  “  without 
prejudice  to  any  question  in  the  case.  ”  Then  followed  another 
series  of  briefs  and  replies  occasioned  by  a  motion  on  the  part 
of  the  defendant  to  modify  the  decree  of  reference. 

This  contention  over  the  wording  of  the  decree  brought  to 
light  the  fundamental  difference  between  two  alternative  methods 
of  apportioning  the  debt.  The  assumed  international  law  basis 
might  be  taken,  which  would  require  the  division  of  the  debt 
according  to  the  relative  area,  population  and  taxable  property 
of  the  two  commonwealths.  Or,  on  the  other  hand,  the  pro¬ 
vision  of  the  Wheeling  ordinance  might  be  treated  as  a  binding 
agreement  which  would  require  the  ascertainment  of  West 
Virginia’s  liability  according  to  a  definite  plan  of  calculation. 
This  plan  assumed  that  on  the  division  of  a  state  local  debts 

attorney-general  of  West  Virginia  (Charleston,  W.  Va.,  1907;  2  vols.  with  ap¬ 

pendix).  For  convenient  reference  this  work  is  cited  throughout  the  article  as  the 
West  Virginia  Compilation. 

1  206  U.  S.  290. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX 


.566 

go  with  the  territory  to  which  they  belong.  At  every  stage  in 
the  controversy,  the  only  liability  which  West  Virginia  has  ad¬ 
mitted  is  on  the  basis  of  the  Wheeling  ordinance. 

Accountants  who  have  worked  on  the  subject  have  found  the 
ordinance  very  difficult  to  apply  in  detail,  but  if  the  method  of 
calculation  stipulated  in  the  ordinance  were  applied  according 
to  West  Virginia’s  construction,  and  without  including  interest 
on  the  public  debt  as  an  “  ordinary  expense  ”  to  be  proportion¬ 
ally  charged  against  the  new  state,  then  it  appears  that  West 
Virginia  would  actually  have  a  balance  in  her  favor  of  from 
.$769,000  to  $3,123,000,  the  exact  amount  varying  according 
to  the  different  ways  of  construing  the  ordinance.1  This  start¬ 
ling  fact,  it  may  be  noticed,  is  proof  of  the  wisdom  of  the 
Supreme  Court  in  awaiting  the  master’s  preparation  of  full  sta¬ 
tistics  before  committing  itself  to  any  definite  method  of  appor¬ 
tionment.  No  such  statistical  inquiry  had  been  made  when  the 
terms  of  the  ordinance  were  framed. 

Virginia’s  attitude  on  the  ordinance  has  not  been  one  of  un¬ 
qualified  opposition.  Her  counsel  have  contended  that  the 
ordinance  fixed  upon  West  Virginia  an  obligation  to  bear  a 
“  just  proportion  ”  of  the  state  debt,  and  that  its  terms  should 
never  be  so  construed  as  to  defeat  the  primary  intention  of  se¬ 
curing  an  “  equitable  ”  settlement.  To  make  it  operative  as  a 
method  of  determining  the  amount  to  be  assigned  to  each  state 
without  including  interest  as  an  ordinary  expense  which  under 
its  terms  should  be  charged  against  West  Virginia  would,  ac¬ 
cording  to  Virginia’s  contention,  be  a  gross  injustice.  It  was 
urged  on  behalf  of  the  old  state  that  all  the  provisions  at  the 
time  of  separation  should  be  taken  together  and  construed  ac¬ 
cording  to  their  obvious  intent.  The  constitution  of  West  Vir- 

1  The  following  calculations  have  been  made  on  the  basis  of  the  Wheeling  ordi¬ 
nance,  the  balance  in  each  case  being  in  West  Virginia’s  favor.  Dividing  ordinary 
expenses  on  the  basis  of  population  without  slaves,  the  balance  would  be  $769, 
073.57;  on  the  basis  of  total  population,  $2,232,042.80;  on  the  basis  of  the  valua¬ 
tion  of  real  and  personal  property,  $3,123,818.76.  These  calculations  all  omit 
interest  in  estimating  the  new  state’s  “proportion  of  the  ordinary  expenses  of  the 
state  government  ”  during  the  debt  period,  nor  are  the  amounts  expended  in  im¬ 
provements  through  corporations  charged  against  West  Virginia.  Complainant’s 
Reply  Brief,  Appendix  no.  vi,  Debt  Suit,  p.  530. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


567 

ginia  recognized  a  “previous  liability”  and  promised  that  the 
state  would  bear  an  “  equitable  proportion  ”  of  the  debt,  but 
omitted  the  terms  of  calculation  found  in  the  ordinance.  These 
terms  were  also  omitted  in  the  act  of  acceptance  by  which  the 
“  restored  ”  government  of  Virginia  “  conceded  ”  to  the  new 
state  its  right  to  exist.  The  apportionment,  according  to  Vir¬ 
ginia’s  claim,  should  be  made  on  some  basis  which  would  take 
into  account  relative  population,  area  and  property  values  at  the 
time  of  partition. 

In  its  decree  referring  the  cause  to  a  special  master  the 
Supreme  Court  specified  in  seven  clauses  the  distinct  points  on 
which  the  master  was  to  prepare  findings  based  on  evidence. 
He  was  to  ascertain  the  amount  and  form  of  the  debt  on  Janu¬ 
ary  1,  1861  ;  the  extent  and  value  of  the  territory  of  the  two 
states  on  June  20,  1863,  and  the  population  with  and  without 
slaves  at  the  same  date.  Besides  these  points  the  decree  con¬ 
tained  various  items  derived  from  the  Wheeling  ordinance. 
The  special  master1  employed  expert  accountants  and  conducted 
many  hearings,  as  his  elaborate  reports,  schedules  and  exhibits 
indicate.  He  had  little  difficulty  in  determining  the  amount  of 
the  debt  to  be  $33, 897, 073. 82. 2  He  found  that  the  free  popu¬ 
lation  at  the  time  of  separation  was  so  divided  as  to  give  West 
Virginia  almost  exactly  one-third,  while  she  possessed  only  24.5 
per  cent  of  the  population  with  slaves.3 

An  important  feature  of  the  master’s  report  related  to  prop¬ 
erty  valuation.  The  fifth  clause  of  the  decree  made  it  necessary 
to  ascertain  the  fair  valuation  of  real  and  personal  property  in 
the  two  states  on  June  20,  1863.  Two  difficulties  were  en- 

1  Charles  Edgar  Littlefield,  formerly  a  member  of  the  House  of  Representatives, 
and  attorney-general  of  Maine. 

2  Certain  bonds  of  the  commonwealth  had  been  acquired  by  the  state  authorities 
and  held  in  the  “  sinking  fund  ’  ’  created  for  the  gradual  redemption  of  the  debt,  and 
in  the  “literary  fund”  devoted  to  educational  purposes.  Virginia  urged  that  these 
sums,  approximately  $2,500,000,  should  be  added  to  the  debt,  but  the  master  ruled 
out  the  items  on  the  ground  that  the  acquisition  of  state  bonds  as  a  part  of  the 
public  funds  of  the  state  was  virtually  an  extinguishment  of  the  debt  to  that  amount. 
Master’s  Report,  paragraph  i.  Virginia’s  objections  under  this  head  were  later 
withdrawn,  220  U.  S.  3. 

3  Master’s  Report,  paragraph  ii. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX 


568 

countered  here.  The  ravages  of  war  had  caused  great  depre¬ 
ciation  of  property,  at  the  same  time  making  its  value  difficult 
of  ascertainment,  and  the  Confederate  currency  of  the  time 
was  a  false  standard  by  which  to  measure  this  value.  The 
master,  after  examining  all  the  available  evidence,  estimated 
that  real  estate  in  Virginia  had  depreciated  one-half,  as  com¬ 
pared  to  i860  or  1861,  and  made  his  finding  on  this  basis, 
allowing  for  no  depreciation  in  West  Virginia,  however,  except 
in  the  eastern  counties.  This  finding  gave  West  Virginia  real 
estate  a  value  of  67  millions  in  round  numbers  as  against  148 
millions  for  Virginia.  Regarding  personal  property,  the  master 
discovered  an  actual  increase  in  value  during  the  war,1  and 
reported  403  millions  of  dollars  as  the  valuation  of  Virginia, 
including  slaves,  as  against  30  millions  for  West  Virginia.  The 
total  real  and  personal  property  in  1863,  including  slaves,  was 
found  to  be  551  millions  in  Virginia  and  98  millions  in  West 
Virginia.  Estimating  the  debt  on  this  basis  West  Virginia 
would  pay  about  1 5  per  cent.  Without  slaves  the  total  value 
of  all  property  in  Virginia  was  found  to  be  300  millions  and 
in  West  Virginia  92  millions;  on  this  basis  West  Virginia 
would  be  charged  with  23.5  per  cent,  of  the  debt.2 

The  jurisdictional  question  having  been  settled  and  the 
master’s  report  completed,  the  case  was  reopened  before  the 
Supreme  Court  in  March,  1911.  The  counsel  for  Virginia 
emphasized  the  broad  equities  of  the  case,  declaring  that,  of 
the  common  debt,  Virginia,  “  at  a  painful  sacrifice,  from  the 
scant  means  of  an  impoverished  people,”  had  paid  or  assumed 


1  The  quantity  of  personal  property  was  considerably  reduced,  but,  in  the  opinion 
of  the  special  master,  this  was  more  than  offset  by  the  immense  increase  in  the  de¬ 
mand  for  such  property  as  horses,  cattle,  sheep,  and  hogs,  due  to  the  presence  of 
large  armies.  In  the  master’s  calculation  allowance  was  made  for  property  exempted 
from  taxation,  such  as  mechanics’  tools  and  agricultural  implements,  and  all  necessary 
corrections  due  to  the  character  of  the  money  standard  were  made.  Master’s  Report, 
paragraph  v.  The  counsel  for  Virginia  strenuously  opposed  this  feature  of  the 
master’s  finding  in  his  brief  before  the  Supreme  Court  in  March,  1911.  Debt  Suit, 
p.  438  ff. 

2The  exact  figures  were  $300,887,367.74  for  Virginia  (76.5026  per  cent),  and 
for  West  Virginia  $92,416,021.65  (23.4974  per  cent).  Master’s  Report,  paragraph 
v,  p.  172. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


569 

seventy-four  millions,1  principal  and  interest,  while  West  Vir¬ 
ginia,  although  profiting  from  the  liberality  of  the  old  common¬ 
wealth,  “  had  not  paid  one  dollar,  but  had  refused  to  pay,  and 
had  denied  her  liability  to  pay  any  part  of  the  debt.”2  The 
specific  relief  sought  by  Virginia,  therefore,  was  to  have  West 
Virginia’s  portion  of  the  common  indebtedness  ascertained  and 
to  secure  its  payment.  West  Virginia’s  original  promise  to 
bear  a  just  proportion  of  the  debt  must  be  met,  and  in  ascer¬ 
taining  her  proportion  not  only  the  Wheeling  ordinance, 
reasonably  construed,  but  the  later  and  paramount  provisions 
of  West  Virginia’s  first  constitution  and  the  restored  state’s  act 
of  consent  were  to  be  considered.  By  these  acts  West  Virginia 
was  made  liable  for  an  “  equitable  ”  share  of  the  debt,  and  if 
she  had  not  assumed  it  Congress  would  never  have  consented 
to  the  erection  of  the  new  state.  Proceeding  to  an  analysis  of 
the  master’s  findings,  Virginia’s  counsel  then  insisted  that,  in 
spite  of  the  master’s  conclusion,  all  expenditures  by  Virginia 
through  joint  stock  companies  within  the  limits  of  the  new 
state  should  be  charged  against  West  Virginia,  and  that  under 
the  head  of  ordinary  expenses  of  the  state  government  West 
Virginia  should  be  charged  with  interest,  since  it  was  the 
“  largest,  most  important,  regular  and  necessary”  of  the  charges 
against  the  state.  The  claim  that  Virginia  had  no  interest  in 
the  suit  was  held  to  be  unwarranted,  because  she  was  the  trustee 
for  the  holders  of  the  deferred  certificates,  and  because  the 
refunding  acts,  since  they  did  not  force  the  exchange  of  the 
old  certificates  for  the  new,  had  not  affected  the  state’s  former 
obligation  to  satisfy  the  certificate  holders  under  the  act  of 
1871,  to  whom  she  was  still  liable. 

Adopting  a  composite  basis  of  calculation,  combining  terri¬ 
torial  area,  population  with  slaves,  and  assessed  values  of  land, 

1  This  74  millions,  figured  at  the  close  of  1910,  comprised  the  interest  payments 
already  made,  the  payments  retiring  portions  of  the  principal,  and  the  amount  out¬ 
standing  and  unpaid,  about  25  millions,  on  which  Virginia  regularly  pays  interest. 
Debt  Suit,  p.  384. 

2  The  legislature  of  West  Virginia  resolved  in  1905  “that  the  state  of  West  Vir¬ 
ginia  does  not  owe  any  part  of  the  so-called  Virginia  debt,  and  that  this  legislature 
is  opposed  to  any  negotiations  whatsoever  on  the  subject.”  Joint  Resolution  no.  3, 
adopted  January  20,  1905. 


5?o 


POLITICAL  SCIENCE  QUARTERLY  [ Vol.  XXX 


Virginia’s  counsel  estimated  that  West  Virginia  should  assume 
$9,652,768.83  of  the  original  debt.1  In  addition,  she  should 
pay  interest  from  January  1,  1861,  until  the  final  discharge  of 
the  obligation. 

In  West  Virginia’s  answer  the  history  of  the  case  was  reviewed 
in  justification  of  the  state’s  separation  from  Virginia  and  of  its 
delay  in  payment  of  the  debt;  the  points  previously  urged  in 
the  contention  over  jurisdiction  were  repeated  and  new  argu¬ 
ments  were  introduced.  Virginia  had  no  right,  so  the  argument 
ran,  to  receive  the  payment  of  West  Virginia’s  portion  of  the 
debt  after  she  had  by  her  refunding  acts  released  herself  from 
all  liability  beyond  her  own  admitted  share.  Virginia  was 
debarred  also  because  she  had  no  direct  interest  in  the  suit.2 
She  could  make  no  accounting  as  to  the  subject-matter  of  the 
controversy  because  her  creditors  had  already  agreed  as  to  the 
amount  which  she  should  assume,  and  because  the  new  state’s 
liability,  “  if  any  exists,”  is  direct  to  the  creditors  and  not  to 
Virginia.  This  is  not  a  general  debt,  representing  expenditures 
which  give  equal  benefit  to  all  parts  of  the  state,  but  a  local 
one  covering  internal  improvements  nine-tenths  of  which  are 
confined  to  Virginia,  and  no  rule  of  public  law  requires  the 
apportionment  of  such  a  debt  on  the  basis  of  taxable  property. 
This  case,  moreover,  is  controlled  by  a  special  agreement,  the 
Wheeling  ordinance  of  August  20,  1861,  which  is  a  binding 
contract  between  the  states.  This  ordinance,  which  must  be 
applied  as  a  whole,  not  merely  in  part,  specifies  a  particular 
method  of  ascertaining  the  amount  which  West  Virginia  should 
pay.  It  does  not  assume  any  part  of  the  debt  as  such,  but 
adopts  a  method  of  calculation  which  takes  into  view  the  equal¬ 
ization  of  past  inequalities  as  well  as  the  assumption  of  future 
liabilities.  Granted,  however,  that  the  Wheeling  ordinance 
should  be  set  aside,  then  the  effect  would  be  to  place  the  ascer¬ 
tainment  of  the  debt  in  the  hands  of  the  legislature  of  West 
Virginia  according  to  the  provision  of  the  new  state’s  constitu- 

1  It  is  well  to  notice  in  this  connection  that,  in  pleading  before  the  Supreme  Court, 
Virginia  does  not  urge  the  two-thirds  division  as  the  proper  apportionment  of  the 
debt,  though  in  her  own  laws  the  finality  of  this  division  is  constantly  assumed. 

2  New  Hampshire  v.  Louisiana,  108  U.  S.  76. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


571 


tion.  As  to  paying  interest  from  January  1,  1861,  there  can 
be  no  such  obligation  resting  on  West  Virginia,  since  the  only 
agreement  at  the  time  was  that  West  Virginia  should  pay  the 
“  accruing  interest,”  to  be  dated  from  the  transfer  of  the  debt. 
This,  in  brief,  was  the  substance  of  West  Virginia’s  case,  though 
various  minor  objections  of  a  technical  sort  were  advanced,  as, 
for  instance,  that  Virginia’s  demand  was  “  multifarious,”  and 
that  the  suit,  having  been  neglected  for  so  long  a  period,  was 
now  debarred  by  laches. 

The  Supreme  Court,  adopting  more  the  tone  of  a  mediator 
than  a  judge,  based  its  opinion  on  the  high  grounds  of  general 
justice,  and  treated  the  subject  in  a  broad  and  untechnical  way.1 
The  provision  in  the  constitution  of  the  would-be  state,  the 
consenting  act  of  the  “  restored  ”  Virginia  legislature,  and  the 
admission  statute  passed  by  Congress  were  held  by  the  court 
to  have  created  a  contract  between  the  two  states  calling  for  the 
payment  by  West  Virginia  of  a  just  and  equitable  proportion  of 
the  debt.  This  contract  was  not  affected  by  the  Wheeling  ordi¬ 
nance,  inasmuch  as  none  of  these  three  acts  mention  the  ordi¬ 
nance,  and  since  an  application  of  the  ordinance  would  defeat 
the  broad  purpose  of  securing  an  “equitable”  settlement.  If 
any  doubt  exists  on  this  point,  the  circumstances  at  the  time  of 
separation  were  such  that  Virginia  should  have  the  benefit  of 
the  doubt.  Regarding  the  suggestion  of  dividing  the  liability 
minutely  according  to  territory,  in  accordance  with  the  location 
of  the  improvements,  the  court  declared  that  the  debt  was  gen¬ 
eral,  designed  for  the  ultimate  good  of  the  whole  state,  that 
many  of  the  improvements  in  Virginia  were  intended  for  ulti¬ 
mate  extension  westward,  and  on  this  ground  it  refused  to  lose 
itself  in  futile  detail  in  an  attempt  to  localize  the  burden  for 
each  transaction  which  the  debt  represented.  The  claim  that 
West  Virginia’s  constitution  had  made  her  legislature  the  sole 
agency  for  settling  the  debt  was  overruled,  and  the  court  then 

1  “The  case  is  to  be  considered  in  the  untechnical  spirit  proper  for  dealing  with  a 
quasi-international  controversy,  remembering  that  there  is  no  municipal  code  govern¬ 
ing  the  matter,  and  that  this  court  may  be  called  on  to  adjust  differences  that  cannot 
be  dealt  with  by  Congress  or  disposed  of  by  the  legislature  of  either  state  31006.“ 
220  U.  S.  i,  p.  27. 


5  7  2 


POLITICAL  SCIENCE  QUARTERLY  [Vol.XXX 


proceeded  to  the  consideration  of  acts  subsequent  to  the  for¬ 
mation  of  the  contract.  The  objection  that  because  of  her 
funding  acts  Virginia  had  no  interest  in  the  suit,  having  dis¬ 
charged  herself  of  all  liability  to  the  deferred  creditors,  was 
waved  aside  as  a  mere  technical  argument.  West  Virginia’s 
liability  was  declared  to  be  a  “  deep-seated  equity,”  not  dis¬ 
charged  by  changes  in  the  form  of  the  debt,  and  the  suit  was 
held  to  be  of  deep  concern  to  Virginia’s  honor  and  credit  in 
spite  of  the  fact  that  she  would  turn  over  the  proceeds.1 

In  figuring  the  proportion  the  court  made  scant  use  of  the 
master’s  voluminous  findings,  and  disregarded  the  Wheeling 
ordinance.  The  master’s  estimate  of  the  value  of  real  and  per¬ 
sonal  property  in  the  two  states  in  June,  1863,  exclusive  of 
slaves,2  was  taken  as  an  equitable  basis  of  division,  and  the  total 
principal  to  be  apportioned  was  declared  to  be  $30,563,861 .56, 
thus  deducting  a  sum  of  $3,333,212.26  which  Virginia  had  vir¬ 
tually  extinguished  by  a  composition  with  her  creditors.  Plac¬ 
ing  Virginia’s  share  of  this  reduced  total  at  76.5  per  cent  and 
West  Virginia’s  at  23.5  per  cent,  the  amount  of  principal 
assigned  to  West  Virginia  was  $7,1 82,507.46.3 

The  decision  in  this  form  was  not  a  final  decree.  One  point 
in  particular  was  left  open,  namely,  the  difficult  question  of 
West  Virginia’s  liability  to  pay  interest.4  The  court  recom- 

1  Compare  United  States  v.  Beebe,  127  U.  S.  338,  342;  United  States  v.  Nash¬ 
ville,  Chattanooga  and  St.  Louis  Ry.  Co.,  1 1 8  U.  S.  120,  125,  126. 

2  It  was  to  Virginia’s  advantage  that  slaves  should  be  left  out  of  the  calculation  in 
determining  the  total  property  values  as  a  basis  for  apportioning  the  debt,  inasmuch 
as  slave  property  was  of  much  less  importance  in  West  Virginia  than  in  Virginia. 

3  “  Virginia  with  the  consent  of  her  creditors  has  cut  down  her  liability  to  not 
more  than  two-thirds  of  the  debt,  whereas  at  the  ratio  shown  by  the  figures  her  share, 
subject  to  mathematical  correction,  is  about  .7651.  If  our  figures  are  correct,  the 
difference  between  Virginia’s  share,  say  $25,931,261.47,  and  the  amount  that  the 
creditors  were  content  to  accept  from  her,  say  $22,598,049.21 ,  is  $3,333,212.26;  sub¬ 
tracting  the  last  sum  from  the  debt  leaves  $30,563,861.56  as  the  sum  to  be  appor¬ 
tioned.  Taking  .235  as  representing  the  proportion  of  West  Virginia  we  have 
$7,182,507.46  as  her  share  of  the  principal  debt.”  220  U.  S.  p.  35. 

4  Though  not  involving  any  decision  regarding  interest,  the  opinion  of  March,  1911, 
hinted  that  Virginia’s  claim  for  interest  dating  from  January  1,  1861,  was  extreme. 
“It  would  be  a  severe  result,”  said  Justice  Holmes  in  delivering  the  opinion,  “to 
capitalize  charges  for  half  a  century — such  a  thing  hardly  could  happen  in  a  private 
case  analogous  to  this.  Statutes  of  limitation,  if  nothing  else,  would  interpose  a 
bar.”  220  U.  S.  p.  36. 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


573 

mended  that  a  conference  between  the  states  be  held  for  the 
purpose  of  making  final  adjustments,  and  suggested  that  the 
case,  being  one  between  “  great  states,”  called  for  forbearance 
on  both  sides.  It  was  understood  that  if  the  states  should  be 
unable  to  arrive  at  a  friendly  settlement,  the  Supreme  Court 
would  impose  a  final  decree  based  upon  a  master’s  calculation. 
Efforts  were  made  by  the  Virginia  commission  to  secure  such  a 
compromise,  but  West  Virginia  delayed  two  years  before  taking 
action  looking  towards  adjustment,  pleading  meanwhile  that  the 
legislature  alone  could  act,  and  that  in  the  special  session  of 
May,  1 9 1 1 ,  called  for  another  purpose,  the  debt  could  not 
legally  be  considered.1 

On  February  21,  1913,  at  its  regular  session  the  West  Virginia 
legislature  tardily  created  a  commission  of  eleven  members 
empowered  to  “  negotiate  .  .  .  for  a  settlement  of  West  Virginia’s 
proportion  of  the  debt  of  the  original  commonwealth,”  requir¬ 
ing,  however,  that  the  commission  should  determine  nothing 
finally,  but  should  report  its  action  to  the  governor  who  should 
then  convene  the  legislature  for  the  “consideration”  of  the 
question.  This  commission  was  organized  in  June,  1913,  and  a 
joint  session  with  the  Virginia  commission  was  held  at  Washing¬ 
ton  July  25—26.  As  neither  commission  had  any  terms  to  sub¬ 
mit  in  the  form  of  a  definite  proposition,  the  session  adjourned 
without  result.  A  long  delay  again  followed,  and  the  West 
Virginia  commission  proceeded  to  the  slow  process  of  “  prepar¬ 
ing  a  proposition,”  probably  intending  after  careful  and  delib¬ 
erate  study  of  the  subject  to  submit  the  offer  of  a  lump  sum  for 
full  settlement.  Virginia  twice  petitioned  the  Supreme  Court 
to  proceed  to  a  final  hearing  of  all  points  left  open  in  March, 
1 9 1 1 ,  but  the  court,  satisfied  of  the  bona-fide  intention  of  West 
Virginia  to  make  an  adjustment,  denied  both  motions.2 

On  March  4,  1914,  the  commissions  from  the  two  states 
again  met  in  Washington,  and  the  negotiations  hinged  upon  a 
"“proposition”  offered  by  West  Virginia.  The  men  from  the 


1  Proceedings  in  the  Virginia  Debt  Case,  printed  by  order  of  A.  A.  Lilly,  attor¬ 
ney-general  of  West  Virginia.  (Charleston,  W.  Va.,  1913.) 

2  222  U.  S.  17  (October,  1911);  231  U.  S.  89  (November,  1913). 


574 


POLITICAL  SCIENCE  QUARTERLY  [Vol.  XXX! 


new  state  claimed  the  “discovery”  of  an  extensive  series  of 
credits  and  assets  which  would  materially  reduce  the  amount  of 
their  obligation.  It  is  impossible  here  to  enumerate  these 
items,  but  they  consisted  mainly  of  cash  on  hand  in  the  Virginia, 
treasury  in  various  funds,  railroad  and  bank  stocks  sold  by 
Virginia  without  West  Virginia’s  consent  though  they  had  been 
acquired  by  funds  common  to  both  states,  interest  and  divi¬ 
dends  on  investments  etc.  The  valuation  of  these  securities  as 
of  January  I,  1861,  was  estimated  at  $20,810,357.98,  and  West 
Virginia’s  net  share  of  these  assets  (.235  minus  certain  minor 
reductions)  was  figured  at  $4,855,312.18.  After  subtracting 
this  amount  from  West  Virginia’s  share  as  fixed  by  the  Supreme 
Court  ($7,1 82,507.46) ,  the  commission  announced  that  the 
balance,  $2,327,195.28,  would  be  the  proper  sum  to  be  paid  by 
the  new  state  as  a  final  satisfaction.  In  case  Virginia  should 
accept,  the  commission  offered  to  recommend  a  called  meeting 
of  the  legislature  to  vote  this  sum.  The  offer  was  rejected  by 
the  Virginia  commission.1 

In  the  following  month,  April,  1914,  the  case  was  reopened 
before  the  Supreme  Court  on  a  motion  of  West  Virginia  to 
“  file  a  supplemental  answer.”  West  Virginia’s  case  centered 
on  these  “  newly  discovered  ”  credits.  In  rejoinder  Virginia’s 
counsel  urged  that  after  forty  years  of  controversy  and  eight 
years  of  litigation  before  the  Supreme  Court,  after  all  the  docu¬ 
ments  and  records  had  been  exhaustively  ransacked  and  elab¬ 
orate  findings  presented  by  the  special  master,  and  after  the 
Supreme  Court  in  a  “  final  ”  hearing  of  the  case  had  fixed  West 
Virginia’s  share  of  the  principal  at  seven  millions,  it  was  no 
longer  in  order  for  the  defendant  state  to  present  a  totally  new 
line  of  defense  which  was  open  to  her  from  the  first,  and  thus 
to  prolong  the  litigation.2 

Chief  Justice  White,  in  delivering  the  opinion  of  the  court 
of  June  8,  interpreted  the  decision  of  1911  as  intended  to 
leave  open  merely  the  question  of  interest,  and  any  changes 


1  Statement  of  Negotiations  between  the  Debt  Commissions  of  the  Two  States 
(printed  by  order  of  W.  Va.  Com.,  March,  1914). 

2  Brief  for  Complainant,  April  13,  1914  (Appeals  Press,  Richmond). 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


575 


that  might  possibly  be  necessitated  through  clerical  error.1  It 
was  intimated  that  most  of  the  items  in  the  supplemental 
answer  had  been  contained  in  the  master’s  report,  and  that  all 
the  credits  so  presented  were  “  known  or  could  have  been 
known  by  the  use  of  ordinary  diligence  by  those  representing 
West  Virginia.”  The  court  granted  the  defendant’s  motion  to 
file  the  supplemental  answer,  even  though  such  permission 
would  not  be  allowed  to  a  private  litigant,  on  the  ground  that 
the  intention  throughout  had  been  to  handle  the  case  on  the 
broadest  lines  of  justice,  and  to  leave  no  “  room  for  the  slightest 
inference  that  the  more  restricted  rules  applicable  to  individuals 
[had]  been  applied  to  a  great  public  controversy,  or  that  any¬ 
thing  but  the  largest  justice  after  the  amplest  opportunity  to  be 
heard  [had]  in  any  degree  entered  into  the  disposition  of  the 
case.”  A  special  master  was  appointed  to  consider  the  answer 
with  Virginia’s  traversing  arguments,  and  to  report  his  findings 
in  the  following  October. 

What  may  be  regarded  as  the  concluding  stage  in  this  litiga¬ 
tion  was  at  last  reached  on  June  14,  1915,  when  Mr.  Justice 
Hughes  announced  the  final  decree  of  the  Supreme  Court 
touching  upon  all  the  points  still  left  open.  It  is  impossible  in 
the  limited  space  to  do  more  than  briefly  to  suggest  the  effect 
of  this  important  decision.  An  extensive  and  essentially  new 
investigation  had  been  completed  by  the  master,  and  the  court 
considered  his  findings  together  with  the  exceptions  thereto 
which  were  urged  by  Virginia,  the  bondholding  creditors  and 
West  Virginia.  The  various  classes  of  credits  claimed  in  West 
Virginia’s  supplemental  answer  were  allowed  on  the  ground  that 
they  consisted  of  moneys  and  securities  specifically  dedicated  to 
the  payment  of  the  debt,  and  that  it  would  be  inequitable  to 
charge  the  new  state  with  her  proportion  of  the  debt  and  refuse 
to  recognize  her  share  of  the  assets  pledged  as  security  for  its 
discharge.  Using,  in  the  main,  the  master’s  valuation  of  these 
assets  as  of  January  I,  1861,  the  court  found  the  total  amount 
of  the  credits  to  be  $14,929,161.44.  West  Virginia  was  credited 
with  23.5  per  cent  of  this  amount,  but  at  the  same  time 


1  234  u.  S.  1 17. 


POLITICAL  SCIENCE  QUARTERLY  [Vol.XXX 


576 

charged  with  $541,467.76  received,  in  money  and  securities, 
from  the  “  restored  government”  of  Virginia.  This  would  give 
West  Virginia  a  credit  of  $2,966,885.18,  which,  deducted  from 
the  $7,1 82,507.46  of  the  1911  decision,  would  leave  as  her 
equitable  proportion  of  the  principal  debt  the  sum  of  $4,215, 
622.28. 

So  much  of  the  decision  was  favorable  to  West  Virginia.  On 
the  vital  subject  of  interest,  however,  Virginia’s  main  contention 
was  sustained.  The  court  declared  in  this  connection: 

As  it  was  plainly  not  the  intention  either  that  the  bondholders  should 
go  without  interest  as  to  the  proportion  assumed  by  West  Virginia,  or 
that  there  should  be  left  with  Virginia  the  entire  burden  of  meeting 
the  interest  on  the  outstanding  bonds  while  the  principal  was  appor¬ 
tioned,  it  must  follow  that  the  assumption  of  an  equitable  share  by 
West  Virginia  related  to  the  liability  for  both  principal  and  interest. 
We  cannot  read  the  contract  otherwise.  Nor  do  we  think  that  in  the 
construction  of  the  provision  of  the  constitution  of  West  Virginia  (Art. 
viii,  sec.  8),  which  defines  her  engagement,  the  second  clause  can  be 
ignored.  After  stating  that  an  “  equitable  proportion’’  of  the  public 
debt  shall  be  assumed  by  West  Virginia,  it  is  provided  that  “  the  legis¬ 
lature  shall  ascertain  the  same  as  soon  as  may  be  practicable,  and  pro¬ 
vide  for  the  liquidation  thereof,  by  a  sinking  fund  sufficient  to  pay  the 
accruing  interest,  and  redeem  the  principal  within  thirty-four  years.” 
If  there  could  otherwise  be  any  doubt  as  to  what  was  embraced  in  the 
contract  of  assumption,  this  provision  would  dissipate  it. 

The  question  as  to  what  rate  of  interest  should  be  charged 
was  a  problem  complicated  by  the  fact  that  Virginia  had  not 
paid  upon  her  share  the  rate  reserved  in  her  bonds,  that  bonds 
had  been  issued  for  back  interest,  that  interest  upon  interest 
had  been  paid,  and  that  from  time  to  time  arrangements  with 
the  creditors  had  been  made  by  the  old  state  for  varying  rates 
of  interest.  The  court  came  to  the  conclusion  that  the  equitable 
rights  of  both  states  would  be  substantially  respected  by  figur¬ 
ing  the  interest  from  January  1,  1861,  to  July  1,  1891,  at  four 
per  cent,  and  from  July  1,  1891,  to  July  1,  1915,  at  three  per 
cent.  The  interest  thus  amounted  to  $8,1 78,307.22,  and  West 
Virginia’s  total  obligation,  principal  and  interest,  was  set  at 


No.  4] 


THE  VIRGINIA  DEBT  CONTROVERSY 


5  77 

$12,393,929.50.  Furthermore,  upon  this  amount  awarded* 
interest  at  five  per  cent  was  to  be  charged  from  the  date  of 
the  entry  of  the  decree  until  payment.1 

On  the  whole  this  decision  will  be  regarded  as  a  victory  for 
Virginia,  yet  it  contains  the  essential  features  of  a  compromise. 
Whether  West  Virginia  could  have  made  better  terms  by  nego¬ 
tiation  at  any  time  since  191 1  is  doubtful,  though  it  seems  clear 
that  a  peaceable  adjustment  prior  to  that  time  would  have  been 
to  her  advantage.  Inasmuch  as  the  matter  has  now  been  dis¬ 
posed  of  by  a  final  decree  of  the  highest  tribunal,  fixing  a 
definite  award,  it  would  seem  that  the  only  remaining  step  in 
the  proceedings  is  for  West  Virginia’s  legislature  to  vote  the 
stipulated  amount,  issuing  bonds  as  a  convenient  way  of  financ¬ 
ing  the  operation.  Yet  as  these  lines  are  being  written  there 
are  rumors  that  there  will  still  be  some  obstruction  placed  in  the 
way  of  the  bondholders’  recovery  of  the  amount  due,  and  that 
resort  to  some  form  of  compulsion  will  be  necessary.2 

James  G.  Randall. 

Roanoke  College. 

1  35  Sup.  Ct.  Rep.  795.  In  the  published  decision  the  date  July  1,  1915,  was  used 
for  convenience,  but  in  the  actual  award  the  interest  was  to  be  calculated  to  the 
date  of  entry  of  the  decree. 

2  For  a  possible  method  of  executing  a  financial  judgment  of  the  Supreme  Court 
against  a  state,  see  South  Dakota  v.  North  Carolina,  192  U.  S.  286. 


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